EXECUTIVE SUMMARY

Introduction

The City of Cabuyao is located about 43 kilometers southeast of Metro Manila at the
western portion of Laguna. It is bordered by the Laguna de Bay, the country's largest lake,
to the north (N) Cabuyao City, to the east with Barangay Uwisan (NE), Banlic and San
Cristobal and Mapagong and Canlubang (SE), some portion of Silang Cavite (Brgy.
PutingKahoy) to the South (S) and Santa Rosa City to the West (W) with the Barangays
Malitlit (SW), Dita (W) and Caingin (NW), respectively. Cabuyao is approximately 54
kilometers away from Santa Cruz, the provincial capital, and nine kilometers from the center
of Cabuyao City, the chartered city and regional center of CALABARZON region.

By virtue of Republic Act (RA) No. 10163, the town of Cabuyao has been converted into a
component City after the ratification of a plebiscite held on August 4, 2012. The City of
Cabuyao is the 142nd city in the Philippines and 5th component city in Laguna besides the
cities of San Pablo, Calamba, Santa Rosa and Biñan.

The City covers an area of 4,291.5648 hectares distributed to 18 political subdivisions,

namely: the Barangays of Baclaran, Banaybanay, Banlic, Bigaa, Butong, Casile, Diezmo,
Gulod, Mamatid, Marinig, Niugan, Pittland, Poblacion Uno, Poblacion Dos, PoblacionTres,
Pulo, Sala and San Isidro, all headed by elected Punong Barangays.

The City maintains three funds: the General Fund (GF), the Special Education Fund (SEF),
and the Trust Fund (TF). Under the GF are the special accounts for 20 percent Local
Development Fund and Economic Enterprises operated by the City which includes the
Market and Slaughterhouse, Ospital ng Cabuyao with Dialysis Clinic, and the Cemetery.

The Organizational Structure of the City is as follows:

a) Key Officials

 City Mayor : Hon. Atty. Rommel A. Gecolea

 City Vice-Mayor : Hon. Atty. Leif Laiglon A. Opiña
 Members of the Sanggunian :

1. Hon. Dr. Benjamin C. del Rosario

2. Hon. Amelito G. Alimagno
3. Hon. Jaime Onofre D. Batallones
4. Hon. Ma. Fe P. Humarang
5. Hon. Jan Christian A. Entredicho
6. Hon. Gabriel C. Bariring
7. Hon. Maria Wanda C. Alimagno
8. Hon. Tito Fortunato A. Caringal II
9. Hon. Atty. Francis Angelo A. Lopez
10. Hon. Jose G. Alcabasa, Jr
11. Hon. Dennis Felipe C. Hain – Association of Barangay Captains (ABC) President
12. Hon. Mikaela Camille C. Caunin – Pangulo ng Pedersyon ng Sangguniang
Barangay

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  City Accountant : Ms. Elenita O. Trinos
 City Treasurer : Ms. Jovita E. Bienes

b) No. of Personnel Complement

Permanent 550
Elective Officials 14
Casual/Contractual 741
Contract of Service (Job Order Workers, Barangay
Nutrition Scholars, Barangay Health Workers,
City Traffic Management Officers, Street
Sweepers) 593
Total 1,898

Financial Highlights

For Calendar Year (CY) 2019, the City of Cabuyao realized an income of
P2,257,572,526.96 registering an increase of P174,360,564.36 or 8.37 percent from last
year’s figure of P2,083,211,962.60.

The total assets, liabilities, equity, revenue, and expenses for CY 2019 as compared with
that of the preceding year are as follows:

2019 2018 Increase

(Decrease)
Assets P5,388,647,151.30 P4,770,908,842.10 P617,738,309.20
Liabilities 1,472,558,528.52 1,409,867,719.10 62,690,809.42
Equity 3,916,088,622.78 3,361,041,123.00 555,047,499.78
Income 2,257,572,526.96 2,083,211,962.60 174,360,564.36
Expenses 1,771,452,437.05 1,795,626,074.42 (24,173,637.37)

Scope of Audit

Financial and compliance audits were conducted on the accounts and operations of the City
of Cabuyao for CY 2019. The audit was conducted to ascertain the fairness of the
presentation of the financial statements and compliance of the City with laws, rules, and
regulations as well as the economical, efficient and effective utilization of resources.

Audit Opinion on the Financial Statements

The Auditor rendered a qualified opinion on the fairness of the presentation of the financial
statements of the City of Cabuyao, Province of Laguna due to the following:

1. The existence, condition, completeness, and valuation of Property, Plant and Equipment
(PPE) totaling P3,776,265,969.99 gross, could not be ascertained due to incomplete
physical count resulting in an unreconciled balance of P1,616,623,611.20 between the
accounting records and the Report on the Physical Count of Property, Plant and
Equipment (RPCPPE), contrary to the provisions of Section 124 of the Manual on the
New Government Accounting System (MNGAS) for Local Government Units (LGUs),
Volume I and Section 156 of the Rules and Regulations on Supply and Property
Management prescribed for use by COA Circular No. 92-386.

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2. The reciprocal accounts Due from Other Funds and Due to Other Funds showed a
discrepancy of P32,270,020.76 as of year-end, contrary to Section 112 of Presidential
Decree (PD) No. 1445 and the Revised Chart of Accounts prescribed under
Commission on Audit (COA) Circular No. 2015-009 dated December 1, 2015, thus
rendering the balances of the accounts unreliable.

3. The year-end balances of the Cash Local Treasury and the Cash in Bank accounts
reported in the financial statements showed a difference of P561,623.56 and
P141,991,042.35, respectively, with the cashbook due to the inability of the City
Accountant and the City Treasurer to reconcile regularly, the delayed preparation of the
financial statements, and late submission of the monthly bank reconciliation statements
significantly affects the timeliness of the reconciliation, contrary to Section 63(F) of the
Local Treasury Operations Manual (LTOM), Section 74 of PD No. 1445, Items 3.2 to 3.4
of COA Circular No. 96-011 and Section 7.2.1 of the Rules and Regulation on the
Settlement of Accounts (RRSA) prescribed under COA Circular No. 2009-006, thus
resulted in unreliable and doubtful balances of the cash accounts at year-end.

4. The granting and liquidation of cash advances were not strictly monitored by the City,
resulting in the accumulation of the unliquidated balances in an aggregate amount of
P34,618,462.15 as of December 31, 2019, contrary to the provisions of Section 89 of
PD No. 1445, Items 5.1.1, 5.8, 5.9 and 8 of COA Circular No. 97-002 and Item 1.1 of
COA Circular No. 2012-001 dated June 14, 2012, thus understating the related expense
accounts and overstating the reported income and exposing the government funds to
possible risk of loss or misuse.

5. The Real Property Tax (RPT) Receivables and Special Education Tax (SET)
Receivables and their contra accounts Deferred Real Property Tax and Deferred
Special Education Tax were not reported equally at year-end when both receivables
were computed at one percent of the assessed value of the real property units, thus
affecting the fair presentation of RPT/SET Receivables and Deferred RPT/SET Income
year-end balances reported at P109,169,649.86 and P469,044,713.54 and
P109,169,649.86 and P469,044,713.54, respectively, contrary to Section 20 of the
MNGAS for LGUs, Volume I and Sections 232, 233 and 235 of Republic Act (RA) No.
7160.

6. Perpetual Inventory Method was not adopted in accounting for the acquisition of
supplies and materials on several types of inventories in CY 2019 totaling
P89,300,368.65, contrary to Section 114 of the MNGAS for LGUs, Volume I, resulting in
the overstatement of the affected expense accounts and the understatement of the
inventory accounts by an amount equivalent to the supplies and materials inventory still
on hand as of year-end.

7. Stale checks totaling P1,728,066.38 were not canceled and reverted to appropriate
Cash in Bank account as of year-end, contrary to Section 59 of the MNGAS, for LGUs,
Volume I, thus understating the Cash in Bank balances and the related liability
accounts.

8. The accumulated depreciation for Military, Police, and Security Equipment of

P1,233,715.77 under the General Fund (GF) is more than its acquisition costs
amounting to P948,936.00, a difference of P284,779.77 while the depreciation was not
provided for the Medical Equipment account under the Special Education Fund (SEF)

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 totaling P6,836,399.76, contrary to Paragraphs 4 and 6 of International Public Sector
Accounting Standards (IPSAS 17), thus resulted in the misstatement of the asset,
equity, income and expense accounts.

9. Significant information to support the balances of some accounts presented in the

financial statements were not disclosed in the Notes to Financial Statements, contrary
to Paragraphs 127(c) and 129 of IPSAS I, thus depriving the users of the financial
statements of additional information value.

Significant Observations and Recommendations

For the exceptions cited above, the following are our recommendations:

1. We recommended that the City Mayor direct the OIC-City General Services Officer
(GSO) to:

a) ensure the conduct of a complete annual physical count of PPE and the periodic
reconciliation with the accounting records to facilitate timely verification and
adjustment of the discrepancy totaling P1,615,426,819.76;

b) assign Property Number/Tag to each PPE that will serve as an effective control on
the use of government property and equipment;

c) see to it the RPCPPE was reviewed and verified before submission to the Audit
Team; and

d) submit the RPCPPE to the Audit Team not later than January 31 of each year, in
compliance with Section 124 of the MNGAS for LGUs, Volume I.

2. We reiterated the previous year’s audit recommendation that the City Mayor direct the
City Accountant to reconcile the reciprocal accounts Due from Other Funds and Due to
Other Funds on a regular and timely basis to determine the causes of discrepancy, and
thereafter, prepare the necessary adjusting entries to bring both accounts in agreement,
to ensure the reliability of the reciprocal accounts.

3. We recommended that the City Mayor instruct the:

a) City Accountant and the City Treasurer to conduct periodic reconciliation of the
cash accounts to ensure the completeness and accuracy of the recorded
transactions as of a given date, in compliance with Section 63(F) of the LTOM and
Section 74 of PD No. 1445; and

b) City Accountant to prepare and submit the financial statements and BRS within the
reglementary period, and prepare the necessary adjusting entries for any
reconciling items in the process prescribed under Items 3.2 to 3.4 of COA Circular
No. COA Circular No. 96-11 dated October 2, 1996, and Section 7.2.1 of the RRSA
prescribed under COA Circular No. 2009-006.

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4. We recommended that the City Mayor:

a) require all personnel with outstanding cash advances to immediately settle their
unpaid balances. Henceforth, compel all employees granted with cash advances to
liquidate the same as soon as the purposes for which these were given have been
served;

b) require the accountable officers to secure a certification from the City Accountant
on the grant of a new cash advance that their respective previous cash advance
was already liquidated;

c) direct the City Accountant to refrain from accepting incomplete liquidation with the
unrefunded unutilized portion of the cash advance;

d) require the concerned accountable officers to refund the unexpended balance of

cash advances totaling P216,164.07;

e) discontinue the practice of granting additional cash advance to any official or

employee unless the previous cash advance given him/her is liquidated and or
proper accounting thereof is made;

f) continue to send demand letters to remind those accountable officers with

outstanding cash advance;

g) require the City Accountant to prepare monthly Status of Unliquidated Cash

Advances for monitoring, copy furnished the Audit Team; and

h) strictly comply with the provisions of Section 89 of PD No. 1445, Items 5.1.1, 5.8,
5.9 and 8 of COA Circular No. 97-002 and Item 1.1 of COA Circular No. 2012-001,
and if necessary, impose the corresponding penalty and sanctions against those
officers with unliquidated cash advances, under Item 5.1.3 of the said COA
Circular.

5. We recommended that the City Mayor instruct the:

a) City Accountant to verify and address the differences that exist between the amounts
set up for RPT Receivables and SET Receivables accounts, as well as their
respective collections, and make the necessary adjustments; and henceforth, always
ensure the equality of amounts set up and collected for RPT and SET Receivables;

b) City Accountant and the City Treasurer to reconcile the balances of RPT/SET
Receivables; and

c) City Treasurer to facilitate the enhancement of the RPT System to expedite the
preparation of the required list of taxpayers showing the correct amount of tax due
and collectible that will serve as the basis for setting up of the RPT and SET
Receivables.

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6. We recommended that the City Mayor require the:

a) City Accountant and the OIC-City GSO to strictly adopt the Perpetual Inventory
Method in accounting for inventory items;

b) OIC-City GSO to maintain updated stock cards for inventories to account for the
receipt and disposition of the same; and

c) OIC-City GSO to ensure the conduct of a complete physical count of inventories and
the periodic reconciliation with the accounting records to facilitate timely verification
and adjustment of the discrepancy, if there is any.

7. We recommended that the City Mayor instruct the:

a) City Treasurer and the Cashier ofthe Pamantasan ng Cabuyao (PnC) to cancel the
stale checks, and the City Accountant to record the adjustment; and

b) City Treasurer to closely monitor the issuance and releases of check and send a
written notice to the payees on the existence of the check at least one month before
the check becomes stale.

8. We recommended that the City Mayor instruct the City Accountant to:

a) review and analyze the PPE Lapsing Schedules, determine the PPE for depreciation,
and depreciate accordingly; and

b) make adjustments in the books of accounts as necessary after the completion of

analysis, and ensure that the analysis on which any adjustment made is adequately
supported by Journal Entries.

9. We recommended that the City Mayor direct the City Accountant to disclose the required
financial information in the Notes to Financial Statements in the ensuing year to assist
the users in understanding the financial statements, and to provide them with additional
information value on the accounts

The other significant observations and recommendations are the following:

1. Unserviceable property with acquisition cost totaling P9,557,315.81 was not disposed of
as of year-end, contrary to Section 79 of PD No. 1445 and Section 125 of the MNGAS
for LGUs, Volume I, thus resulted in further deterioration and decline in the economic
value of the assets.

We recommended that the City Mayor instruct the:

a) OIC-City GSO to prepare the Inventory and Inspection Report of Unserviceable

Property (IIRUP) and initiate the disposal of unserviceable properties to prevent
further deterioration, as required under Section 79 of PD No. 1445, COA Circular
No. 89-296 dated January 27, 1989, and Section 125 of the MNGAS for (LGUs),
Volume I;

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 b) OIC-City GSO to check if the unserviceable property returned to the GSO is beyond
economic repair or that the PPE is still covered with a warranty. Avail of the
warranty if it is still effective; and

c) accountable officers with items acquired in the years 2017 to 2019 to explain and
give information as to how the property became unserviceable.

2. Government buildings and structures totaling P1,687,173,351.00 were not covered with
insurance with the Government Service Insurance System (GSIS), contrary to Section 5
of RA No. 656, otherwise known as the Property Insurance Law and COA Circular No.
2018-002 dated May 31, 2018, thus properties are unprotected from risk in case of loss
or damage.

We reiterated our previous recommendations that the City Mayor:

a) direct the OIC-City GSO to file insurance for the uninsured property with the GSIS
consistent with the provision of Section 5 of RA No. 656;

b) instruct the OIC-City Budget Officer to include in the next budget preparation the
appropriation for the insurance of the other buildings owned by the City; and

c) direct the City Accountant and the City Treasurer to coordinate for the timely
processing and payment of GSIS insurance for insurable property, in compliance
with the Property Insurance Law.

3. The shares of the barangays from the proceeds of the Real Property Tax Income (RPTI)
for CY 2019 aggregating P85,516,866.60 were not released within five days after the
end of each quarter, contrary to Section 271(d) of RA No. 7160, thus affecting the ability
of these local government units to implement plans and programs with results
appropriate to the needs of their constituents and exposing the funds to possible
misapplication.

We recommended that the City Mayor instruct the City Accountant and the City
Treasurer to release the barangays’ shares in the RPTI within five days after the end of
each quarter as required in Section 271(d) of RA No. 7160.

We also recommended that the City Mayor require the City Accountant and the City
Treasurer to submit a written justification for their failure to remit the said amount on
time.

4. The City was unable to submit within the reglementary period the Agency Action Plan
and Status of Implementation (AAPSI) contained in the CY 2018 Annual Audit Report
(AAR), contrary to Section 93 of the General Provision of RA No. 10651 dated
December 29, 2014, thus incurring delay in the monitoring and validation of the Audit
Team on the action taken by the City.

We recommended that the City Mayor:

a) consider calling a meeting with the Department/Office Heads to tackle the issues
and concerns contained in the AAR to adopt a coordinated action plan;

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 b) submit the duly accomplished AAPSI on all audit observations and audit
recommendations as soon as the appropriate plan of action is finalized; and

c) ensure that the City’s AAPSI is submitted to the Audit Team within 60 days from
receipt of the AAR, in compliance with Section 93 of the General Provision of RA No.
10651.

5. Special Accounts were not maintained in the General Fund Books, contrary to Section
313(a) of RA No. 7160 and the provisions in Chapter 6 of the MNGAS for LGUs,
Volume I, thus the adequate information on the financial position and condition of the
special account as of a given date are not immediately available to guide Management
in making sound decisions relative to the operation of the said accounts.

We recommended that the City Mayor instruct the City Accountant to maintain special
accounts for Market, Slaughterhouse, Cemetery, and Hospitals to guide Management
in making sound decisions in their operations, in compliance with Section 313 of RA
No. 7160 and the provisions of Chapter VI of the MNGAS for LGUs, Volume I.

6. The City was unable to submit the monthly Trial Balances (TBs) and other related
financial reports within the prescribed period, contrary to the provisions of Section 122
of PD No. 1445, Section 7.2.1(a) of the RRSA prescribed by COA Circular No. 2009-
006 and Sections 70 and 72 of the MNGAS for LGUs, Volume I, thus resulting in the
delay in the audit of financial transactions and accounts for CY 2019.

We recommended that the City Mayor require the City Accountant, City Treasurer and
the President of the Pamantasan ng Cabuyao (PnC) to strictly enforce and observe the
regular and timely submission of the financial statements and other related reports, as
prescribed under Section 122 of PD No. 1445, Section 7.2.1(a) of the RRSA prescribed
by COA Circular No. 2009-006 and Sections 70 and 72 of the MNGAS for LGUs,
Volume I.

7. Disbursement Vouchers (DVs), collections reports, and their supporting documents

covering January to December 2019 were continuously not submitted within the
reglementary period, contrary to Sections 7.1.1(a) and 7.2.1(a) of the RRSA prescribed
by COA Circular No. 2009-006 and Section 6.03 of COA Circular No. 95-006 dated May
18, 1995, thus resulted in the delay of review and verification of the related transactions
of the City.

We recommended that the City Mayor instruct the:

a) City Accountant to submitthe DVs, collection reports and their supporting documents
to the Audit Team within the reglementary period to facilitate the review and
verification of the same; and

b) City Accountant and the City Treasurer to look into the root cause of the delayed
submission of accounts and immediately take the necessary action to solve the
problem.

8. Petty Cash by an absconded Accountable Officer (AO) of P10,027.85 has been

outstanding for more than 16 years and remained unacted upon by the City, contrary to
Section 2 of PD No. 1445.

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 We recommended that the City Mayor instruct the City Accountant to issue demand
letter to the absconded Accountable Officer.

We also recommended that requests for the write-off of the said receivable be filed with
the COA should collection of the same is no longer feasible despite diligent efforts.

9. Job Order (JO) workers were tasked to perform regular official functions which are part
of the job description of a regular employee, contrary to Items 5.4 and 7.2 of Civil
Service Commission-Commission on Audit-Department of Budget and Management
(CSC-COA-DBM) Joint Circular (JC) No. 1, s. 2017, thus these workers lack social
protection and inequality of benefits and accountability is not clear due to lack of
employee-employer relationship.

We recommended that the City Mayor instruct the City Human Resource Management
Officer to:

a) ensure that the regular functions are tasked to regular plantilla personnel of the City
who could be held responsible and accountable for their actions; and

b) evaluate the performance of the JO workers assigned in various departments/offices

and determine if some would be qualified to be hired as regular employees and/or
elevated to casual status.

10. The City has not fully utilized and implemented its planned programs, projects and
activities (PPAs) intended for the protection and/or upliftment of the children’s
rights/lives, spending only P3,137,313.24 or 41.28 percent of the P7,575,436.92 amount
allocated, thus affecting its crucial role in the protection of children and promotion of
their rights and welfare.

We recommended that the City Mayor instruct the City Social Welfare and Development
Officer (CSWDO) to fully implement the PPAs in coordination with other City officials for
the benefits and protection of children, in compliance with Section 15 of RA No. 9344
and DILG Memorandum Circular (MC) No. 2012-120.

11. The plan of the City to assist the barangays in the establishment of Material Recovery
Facilities (MRFs) required under Section 1, Rule XI of the Implementing Rules and
Regulations (IRR) of RA No. 9003 and Department of Interior and Local Government
(DILG) Memorandum Circular No. 2009-168, did not materialize due to the unavailability
of lots for the construction of MRF, hence defeated the purpose of providing an
ecological solid waste management facility, particularly for the collection, segregation,
recycling of biodegradable, recyclable, compostable and reusable wastes.

We recommended that the City Mayor instruct the City Environment Natural Resources
Officer and other City officials to facilitate the installation of MRF in every barangay or
cluster of barangays for efficient implementation of segregation of waste.

12. The members of the Bids and Awards Committee (BAC), Technical Working Group
(TWG), and BAC Secretariat were paid honoraria totaling P1,608,770.75 equivalent to
25 percent of their basic monthly salaries without the list of successfully completed
procurement projects and other related documents, and were not subjected to tax,

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 contrary to DBM Budget Circular No. 2004-5 and Section 2.79 of Revenue Regulation
(RR) No. 10-2008 dated July 8, 2008.

We recommended that the City Mayor:

a) see to it that subsequent claims of honoraria should be based on the provisions

prescribed by DBM Budget Circular No. 2004-5A;

b) instruct the BAC Chairman to submit to the Audit Team the list of completed
infrastructure/procurement projects with the Notice of Award of each project as a
reference for the actual claim of honorarium of P1,608,770.75, in compliance with the
Budget Circular and for further review of the Audit Team;

c) instruct the City Accountant to ensure that withholding taxes are deducted from
payments made, in compliance with Section 2.79 of RR No.10-2008, and remit the
same to the Bureau of Internal Revenue within the prescribed period; and

d) direct the City Accountant to refrain from paying the honoraria to personnel assigned
in the procuring unit of the City, however, they can avail of overtime subject to
existing policies.

13. Contract time extensions granted by the City for two infrastructure projects with a total
contract cost of P648,303,752.92 were not supported with complete documentary
requirements and do not comply with the guidelines prescribed under Annex “E” of the
2016 Revised IRR of RA No. 9184, thus cast doubt on their validity and
reasonableness. Moreover, these infrastructure projects were not completed within the
schedule despite the contract time extensions given, hence warrant the imposition of
liquidated damages.

We recommended that the City Mayor direct the:

a) OIC-City Engineer to:

 ensure that request for a contract time extension is filed within the required
period and substantiated with the necessary documents depending on the
circumstances claimed by the Contractor; and

 conduct a thorough evaluation of every request for contract time extension

taking into consideration the guidelines provided under Annex “E” of the 2016
RIRR of RA No. 9184, and thereafter, prepare an Evaluation Report to
document the results thereof; and

b) City Accountant to impose liquidated damages to the Contractor who failed to

satisfactorily complete a project within the specified contract time, plus any extension
duly granted.

14. The 20 percent Development Fund (DF) totaling P151,508,738.40 was not optimally
utilized by the City, utilizing only P3,770,649.00 or 2.49 percent thereof, due to various
reprogramming requested by the barangays, contrary to the DILG and DBM JMC No.

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 2017-1, thus the desired socio-economic development and environmental outcomes
were not substantially achieved.

We recommended that the City Mayor direct the City Development Council to:

a) evaluate the necessity of the unimplemented projects, especially those in prior years,
and reprogram the same to more important development projects that will cater to
the present needs of the constituents;

b) instruct the member-barangays at the planning stage to thoroughly determine the

development projects that were needed by them before suggesting to the council in
order that various reprogramming will be avoided; and

c) ensure that all projects funded out of the 20 percent DF will be implemented during
the year and that these projects were proposed in order to attain the desired socio-
economic development and environmental outcomes.

15. The list of ongoing government PPAs and those for implementation during the year and
information on the posting of signboards and/or public notices were not submitted to the
Audit Team within the prescribed period, contrary to Sections 2.1 and 3.1 of COA
Circular No. 2013-004, thus monitoring and validation of the said activities were not
immediately conducted.

We recommended that City Mayor require the City Engineering Office to comply strictly
with the requirements of Sections 2.1 and 3.1 of COA Circular No. 2013-004 on the
submission of the required list of ongoing PPAs, and posting of signboards to facilitate
monitoring and validation of the City’s awarded and implemented projects.

16. The City was unable to optimally utilize the 70 percent Mitigation Fund amounting to
P66,386,355.00 of the Local Disaster Risk Reduction and Management Fund
(LDRRMF), utilizing only P7,495,321.00 or 11.29 percent thereof, contrary to DILG
Memorandum Circular (MC) No. 2012-73, thus planned programs, projects and
activities that could lessen the impacts of disasters and upgrade the City’s disaster
preparedness and response capabilities were not implemented.

We recommended that the City Mayor instruct the City Disaster Risk Reduction and
Management Officer (CDRRMO) to comply with DILG MC No. 2012-73 and ensure that
programs, projects, and activities embodied in the LDRRM Plan are implemented to
protect the community from disasters.

17. The laxity in the administration of the Public Market was due to its inability to legally
establish a binding contract of lease between the City and the stallholders and the non-
enforcement of relevant rules and regulations in its operation, contrary to the Revenue
Code of the City of Cabuyao and City Ordinance No. 2018-526 dated March 5, 2018,
thus the duties and obligations of the stallholders could not be evaluated and caused
the low collection and the accumulation of uncollected market fees totaling
P536,700.00. Also, the City was unable to collect the targeted collection of
P18,900,000.00, which is more than the actual collection of P9,987,414.36 from the
operation of the market, thus resulted in an undercollection of P8,912,585.64.

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 We recommended that the City Mayor:

a) direct the Market Administrator to ensure that the contract of lease is signed by the
City officials concerned and the qualified stallholders;

b) direct the Market Administrator to prepare/submit a regular report on the actual

occupants of the market stalls for monitoring purposes;

c) enjoin the Market Administrator and the City Treasurer to prepare and submit
Monthly Report of Collections and report on the uncollected dues of stallholders for
monitoring and recording; and

d) instruct the City Treasurer and the Market Administrator to maximize their efforts to
realize targeted collection to attain efficiency and to generate additional income for
the economic development of the City.

18. As of year-end, a total of P14,044,640.45 out of the P22,018,950.00 fund transfers

received under the Bottom-up Budgeting (BuB) program has been utilized by the City
for the implementation of priority programs and projects, in compliance with Department
of Budget and Management (DBM), Department of Interior and Local Government
(DILG), Department of Social Welfare and Development (DSWD) and National Anti-
Poverty Commission (NAPC) JMC No. 7, thereby attaining the purposes of the funds
and granting the City and its constituents of the expected benefits from the timely
completion of the projects. However, unexpended balances of fund transfers totaling
P419,176.58 were still not returned to source agencies after the completion of the
intended projects, contrary to COA Circular No. 94-013.

We recommended that the City Mayor, in coordination with the assigned focal persons,
continue the immediate implementation of the programs/projects incorporated in the
fund transfers received from the National Government Agencies (NGAs) in order that
intended end-users will readily benefit from the timely completion of those projects.

We also recommended that the City Mayor instruct the City Treasurer to return the
unexpended balances of P419,176.58 to their respective source agencies.

19. The City’s Gender and Development Plan and Budget (GPB) was not submitted to the
Provincial Planning and Development Office (PPDO) and DILG Provincial Office, hence
was not reviewed and endorsed, thereby lacks assurance whether the PPAs
incorporated therein were gender-responsive and in alignment with the priorities of the
province. Also, programs and projects attributed by the City to the GAD budget were
not subjected to the Harmonized Gender and Development Guidelines (HGDG) tool,
contrary to Philippine Commission on Women (PCW), Department of Interior and Local
Government (DILG), Department of Budget and Management (DBM) and National
Economic Development Authority (NEDA) JMC No. 201-01.

We recommended that the City Mayor direct the GAD Focal Point System to:

a) ensure that the GAD Plan and Budget was submitted to the PPDO, and DILG
Provincial Office to confirm its alignment with the priorities of the province and to
properly review the GAD PPAs incorporated therein; and

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 b) submit the required copies of the checklists as proof of the HGDG test undertaken by
the City for the attributed programs in the GAD Plan and Budget, pursuant to Section
3.0 of PCW-DILG-DBM-NEDA JMC No. 2016-01.

20. Of the total Gender and Development (GAD) fund of P94,837,650.00 for CY 2019, the
City was only able to utilize P70,830,805.38 or 74.69 percent thereof, leaving 15 GAD
PPAs unimplemented as of year-end, due to absence of regular monitoring of the
implementation of the GAD Plan and Budget (GPB), thereby the envisioned GAD
objectives and results were not fully attained. Moreover, one item in the GAD budget
with the appropriation of P1,000,000.00 was still utilized by the City for the original
program included in the GPB although it was already reprogrammed by the GAD
Council, thus casting doubt on the legality of the said expenditure.

We recommended that the City Mayor direct the GAD Focal Point System to:

a) ensure that the PPAs included in the GAD Plan and Budget will be immediately
implemented in order that the envisioned GAD objectives and results will be fully
achieved; and

b) provide a valid explanation, substantiated with evidence, to establish the legality of

the P690,529.00 expenses charged against the P1,000,000.00 appropriation of a
GAD PPA that was already reprogrammed.

The above observations and recommendations were discussed with the concerned City
officials and staff. Management’s views and comments were incorporated in the Report,
where appropriate.

Status of Implementation of Prior Year’s Audit Recommendations

Out of the 49 audit recommendations embodied in the CY 2018 Annual Audit Report (AAR),
24 were fully implemented, 21 were partially implemented and four were not implemented by
the City.

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